Euro Struggles to Rally Despite Upbeat German Retail Sales Data

The euro today hit new 3-week lows against the US dollar despite the release of upbeat German retail sales data in the early European session. The EUR/USD currency pair spiked lower shortly after the release of positive German jobs data, then recouped its losses to trade sideways.

The EUR/USD currency pair today spiked to a three week low of 1.1209 before recovering and rallying almost to its daily high of 1.1238.

The currency pair traded sideways during the Asian session amid neutral investor sentiment. The pair had a muted reaction to the upbeat German retail sales data for February released by the Federal Statistical Office. The monthly print came in at 0.90% versus the expected 0.90% decline, while the annualized print was recorded at 4.7% versus the consensus estimate of 2.2%. The release of the German unemployment change report two hours later also had a muted impact on the currency pair as it spiked lower shortly thereafter. The country’s unemployment rate came in at a record low of 4.90%, while the number of jobless claims declined by 7,000, but the two prints could not boost the euro.

The currency pair’s quick rebound was largely attributed to improved market sentiment as well as end of quarter flows that were a bit choppy. The greenback’s slight pullback as tracked by the US Dollar Index also contributed to the recovery.

The currency pair’s short-term performance is likely to be influenced by the US PCE report and the new home sales data.

The EUR/USD currency pair was trading at 1.1229 as at 11:58 GMT having risen from a low of 1.1209. The EUR/JPY currency pair was trading at 124.33 having rallied from a low of 124.12.

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